Monday, August 12, 2019

New Papers on FRAND, SEP Issues, Part 3

1.  Thomas Kühnen, the Presiding Judge of the Düsseldorf Oberlandesgericht, has published an article titled FRAND-Lizenz in Verwertungskette ("FRAND License in Exploitation Chains") in the July 2019 issue of GRUR (pp. 665-73).  Here is the abstract (my translation from the German):
It is widely believed that the owner of a standard essential patent (SEP) has the option of deciding at what level if will offer a FRAND license for its invention; and ordinarily it directs its offer at whichever company stands at the end of the exploitation chain, because the end product incorporating the patented invention, in view of its high sales price, supposedly promises the highest licensing revenue.  The owner will refuse to provide any implementer who comes before the licensee with its own FRAND license, on the supposition that such implementers are adequately protected against an infringement action by virtue of the license granted to the end customer.  The present essay will show, that both assumptions are insupportable.  First, a claim may be asserted by any interested party without special conditions, and thus by anyone who stands at the beginning of the value chain, even if a FRAND license already has been granted to someone further down the chain of distribution.  And second, the FRAND royalty does not depend on the place of the prospective licensee within the valuation chain.
If I'm understanding correctly, Judge Kühnen argues that component manufacturers can demand exhaustive FRAND licenses, but those licenses should reflect the value of the patented invention is expected to have when incorporated in the end product. 

2.  Also in the July 2019 issue of GRUR is a summary (p.725) of the March 22, 2019 decision of the  Oberlandesgericht Düsseldorf ("Improving Handovers"), a case brought by Unwired Planet against Huawei and previously mentioned here, in which the court held that a FRAND commitment is binding on a firm that purchases a SEP from the firm that made the FRAND commitment, and on the same terms.  There is also a more extended essay by Sven Vetter at pp. 704-07, who notes among other matters that Judge Kühnen was the Presiding Judge of the panel.  The author also wonders what the effect will be if the patent owner overdeclared, and the patent is in fact not standard-essential. 

3.  And also in the July 2019 GRUR is an article by Eugenia Hinojal and Gabriele Mohsler titled Die Suche nach richtigen Gleichgewicht zwischen Transparenz und Schutz der Vertraulichkeit innerhalb des FRAND-Rahmens ("The Search for the Correct Balance Between Transparency and Confidentiality in the FRAND Context"), at pp. 674-82.  Here is the abstract (my translation):
Patent owners who participate in formal standard setting processes, often obligate themselves to make their technology available to users on Fair, Reasonable, and Non-Discriminatory (FRAND) conditions.  Most of the time, patent owners and implementers decide what conditions really are FRAND through bilateral negotiations.  To enable the exchange of confidential business and financial information in the course of license negotiations, the parties normally conclude confidentiality agreements.  Should the negotiations lead to a license, moreover, the licensing partners often decide to include confidentiality provisions for the protection of the sensitive information included therein.  The following essay addresses the effects of the parties' subsisting confidentiality obligations on transparency in the context of FRAND licensing negotiations and FRAND-related proceedings worldwide.
The authors conclude with suggestions for patent owners and users voluntarily to publish more information  relevant to the range of potential FRAND rates, etc., the greater use of mediation and neutral third parties, and licensing platforms including Avanci to help implementers evaluate offers and formulate counteroffers.

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